Top Posters
Since Sunday
r
5
m
5
h
5
r
5
t
5
B
5
P
5
s
5
m
5
c
5
c
4
4
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
Satsume Satsume
wrote...
Go to Answer
Posts: 761
Rep: 0 0
6 years ago
As a group, U.S. consumers have no income response for their consumption of ice cream so that the income elasticity of demand for ice cream equals zero.  Does this mean that the change in ice cream consumption that results from a price increase is entirely composed of the substitution effect?
A) Yes, the income effect associated with a price change is zero
B) No, any price change moves the point of consumption to a new indifference curve, so there must be a non-zero income effect
C) No, the income and substitution effects in this case move in opposite directions and completely offset one another, so it only appears that the income effect is zero
D) We need more information about the goods to answer this question
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
Read 50 times
1 Reply
Replies
Answer verified by a subject expert
Bart_argBart_arg
wrote...
#1
Top Poster
Posts: 570
Rep: 14 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

Satsume Author
wrote...

6 years ago
Smart ... Thanks!
noodlelicker
wrote...

Yesterday
Helped a lot
Marcie D
wrote...

2 hours ago
Thank you, thank you, thank you!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  971 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 4147
  
 813
  
 105
Your Opinion
Which industry do you think artificial intelligence (AI) will impact the most?
Votes: 379
Previous poll results: Which 'study break' activity do you find most distracting?